Sinead Rafferty: After the sharp falls in share markets that we saw in October, has there been a subsequent recovery?

Bob Cunneen: There has been a recovery, but it’s been very selective. If you looked at Wall Street, the American share market, you’re seeing roughly about a two per cent gain for November.

Chinese share market, if you looked on some of the selective indices in China, you’ve had a gain of roughly about seven per cent on a MSCI basis.

But against that, other markets have weakened. So Europe’s down and in particular, Australia’s been down about two per cent. So it’s been a disappointing European and Australian performance.

Sinead Rafferty: First of all, why has Europe lagged?

Bob Cunneen: Europe, we’ve got a combination of factors in play there that is causing concern. So, if you looked at the Italian budget situation, there’s a proposal by the new Italian Government to provide more budget stimulus.That’s a concern to their fellow Europeans, because they don’t think that the Italians are fiscally disciplined.

The other concern is Europe is being weighed down by this global trade risk. So in particular, European car manufacturers are concerned that America’s going to impose a tariff, on European car exports.So all these factors have weighed on European economic activity.

Sinead Rafferty: And with the Australian share market, is part of that driven by the fall we’ve seen in oil prices?

Bob Cunneen: Yes, that’s a very large contributor. Because if we looked at the Australian share performance, the biggest drag was the energy sector, which was down about nine per cent. We also saw falls in the metals and mining sector, about five per cent, because of the sharp falls in the iron ore price. And that’s also related to those global trade concerns and signs that maybe the Chinese economy, is slowing down quite significantly.

Sinead Rafferty: We’ve also seen a change in market expectations for rate hikes of the US, and we’ve seen a fall in bond yields. How has that impacted the Australian dollar?

Bob Cunneen: It has impacted the Australian dollar, it’s taken the edge off the American dollar. So the view is now that the Federal Reserve will not be as aggressive, in raising interest rates. And because of that, that helps the Australian dollar and it’s also actually helped Wall Street rebound. But we’ve got to be careful here that these hopes that there were going to be a armistice, or a complete ceasefire in the global trade tension with President Trump, meeting President Xi Jinping in China. That hasn’t been quite resolved, all we have is a truce for the next 90 days from January the 1st. So this global trade issue is still pervading the global economy, and we still need to watch that issue.

Sinead Rafferty: Thanks for your time Bob, and thank you for joining us.